Hydro and NKT sign €1 billion aluminium wire rod deal

Hydro and power cable solutions provider NKT have signed an agreement on wire rod for power cables.

The agreement guarantees supply of low-carbon aluminium from Hydro as NKT ramps up production to meet market demand for medium and high voltage power cable solutions in Europe.

Eivind Kallevik (left), President and CEO of Hydro, and Claes Westerlind, President and CEO of NKT, signing the partnership and long-term agreement on wire rod for power cables.

This is the first new contract since Hydro announced a NOK 1.65 billion investment in a new wire rod casthouse in Karmøy, Norway to meet demand from Europe’s energy sector.

The expansion will allow Hydro to secure a stable supply of low-carbon aluminium wire rod to NKT from 2026 to 2033, with a total committed volume estimated at 274,000 tonnes with an option for additional volumes.

The total quantity of aluminium covered by the agreement, would be able to make medium-voltage cables equivalent to nine times around the world or all the way to the moon, which is approximately 363,000 km away.

The contract has an estimated value of approximately € 1 billion, depending on the quantity and future metal prices.

Upgrading Europe’s outdated grid infrastructure is a key part of the European Commission’s plan to develop a resilient, interconnected and secure energy system fit for the future.

Eivind Kallevik, President and CEO of Hydro., said: “It is with a sense of urgency that Europe is now mobilising to reduce the dependency on fossil fuel imports, introduce more homegrown, renewable power, and ensure security of supply of critical raw materials.
“Together with NKT, we are building a supply chain to provide responsibly sourced aluminium for the infrastructure makeover that Europe needs to bring down energy prices, accelerate the energy transition and boost European competitiveness.”

Aluminium has been defined by the EU as a critical material with Norway being a key provider, covering 40% of primary aluminium production in Europe.

Source: www.aluminiumtoday.com